In a tweet on Friday, Binance, the world’s largest cryptocurrency exchange volumetrically, announced it will be ceasing operations in Canada. The exchange noted a new set of regulations governing the cryptocurrency industry in the country will complicate its operations to the point it will have to exit the nation.
In the tweet Binance said, “Today we are announcing that Binance will be joining other prominent crypto businesses in proactively withdrawing from the Canadian marketplace… We had high hopes for the rest of the Canadian blockchain industry. Unfortunately, new guidance related to stablecoins and investor limits provided to crypto exchanges makes the Canada market no longer tenable for Binance at this time.”
The exchange noted that due to the sentimental value Canada holds for Binance founder Changpeng Zhao, the exchange had been putting off its exit from the country. However, since the enactment of the new rules in the country, Binance says it was left without “reasonable avenues to protect our Canadian users.”
The exchange added, “Our remaining Canadian users are receiving an email with comprehensive information on how this will impact their accounts going forward. We hope to continue to engage with Canadian regulators aimed at a thoughtful, comprehensive regulatory framework,” noting it may return to the Canadian market “when Canadian users once again have the freedom to access a broader suite of digital assets.”
The Canadian Securities Administrators (CSA) unveiled new rules, which demanded “enhanced investor protection commitments” from crypto asset exchanges amid the “insolvencies involving several crypto asset trading platforms.” The new rules set up mandatory registrations for crypto exchanges, with investor limits, as it prohibited the purchase or storage of stablecoins within Canada without the CSA’s express permission.
Since the collapse last year of the massive crypto exchange FTX, Binance, along with its rival exchanges, have all been facing increased scrutiny from regulators. The collapse of FTX set off a market rout, wiping billions of dollars from the crypto industry’s market value, and triggering ripples of failures of associated companies.
Lawmakers have since begun demanding tighter regulations and controls on the industry, as well as greater transparency regulations for crypto companies, particularly with regard to how they are handling customer funds.
Reports earlier this year also indicated Binance was considering ending its business relationships with US partners as regulatory scrutiny was increasing in the United States.
